Five million reasons why I admire this industry

By Bill Coffin

LifeHealthPro

The insurance industry has a long history of charitable giving, and since we are coming off of the holiday season, I would like to focus on that for just a moment. I am a big fan of the industry's charitable giving record.

It has always stuck in my craw that the insurance industry has such a bad reputational standing with the general public, considering that its products and services have created perhaps the largest and most efficient social safety net in the history of civilization. More people have been helped by insurance — more businesses saved, more families maintained, more personal fortunes protected — than by any other mechanism that aims to do the same thing. Certainly, it has a better track record than government spending, and this is coming from a guy who is left of center and doesn't mind the government throwing money at our social problems. That may be naive of me, but at least I recognize that the insurance industry does it a whole lot more efficiently than the government does, and the industry never gets enough credit for it.

As if that were not enough, the industry also has a long history of charitable giving, and since we are coming off of the holiday season, I would like to focus on that for just a moment. I am a big fan of the industry's charitable giving record. I was, unfortunately, unable to attend the Insurance Industry Charitable Foundation's annual fundraising dinner in December, but the IICF is a fantastic organization that works to coordinate the insurance world's humanitarian efforts in the hopes of creating a force for good that is greater than the sum of its parts. The IICF has appeared in my column before, and it will do so again, especially since it is working hard at creating as much of a footprint in the life and health insurance world as it has already done in the property and casualty insurance world. These are good people doing good things, and I encourage every insurance professional to see how they could help them out.

I mention all of this because, even though I was still on vacation last night — and traditionally do not follow the news when I have time off — I could not help but follow the last-minute fiscal cliff negotiations and Congressional votes. I never thought that we would really go over the cliff, but thanks to last-minute brinkmanship, Congress let things get dangerously close to the edge. Technically, we did go over the cliff, but the federal government finagled a way to backdate itself so that we didn't. If only they were so flexible with the rest of us on April 15.
Keep in mind that the fiscal cliff was not something that surprised anybody; we all knew this was a problem waiting to be solved for at least a year, but our friends in Washington chose to ignore it until after the national election, giving themselves not quite two months to figure out the solution to a problem that even under excellent circumstances would have required a Herculean effort to fix. What we got was a solution crafted by a herd of cats that couldn't agree on what shade of blue the sky is. Small wonder they went into 2013 to avert a disaster.

Amid all of the political reporting going on last night, it came up that a vote to set up some aid for areas hit by Hurricane Sandy (which darn near made landfall on my house in Oakhurst, NJ) was put off. So, while Congress fought amongst themselves over how to prevent a pretty serious self-inflicted wound, it also managed to drop the ball on something you'd think Congress would be front and center on — providing disaster relief to a historic storm that had already caused tens of millions of dollars of damage.

In comparison, over the span of eight weeks — from October through November 21 — some four thousand New York Life employees and agents raised $3.4 million for the company's annual "Give for Good" giving campaign. NYL's people donated to charities of their choice during the campaign and raised funds through an online auction, bake sales, basketball tournaments, trivia contests and other activities. In so doing, they exceeded what they raised in 2011 by 11 percent. Meanwhile, these same people contributed another $250,000 to disaster relief for Hurricane Sandy victims, an amount that New York Life itself then added $1 million to, raising the total campaign total to more than $5 million.

Now, $5 million might not seem a lot in a world where the words "billion" and "trillion" get thrown around a lot. But it is worth noting that this remarkable effort was carried out by insurance folks in their spare time, while they were still doing things like sending out life insurance claim checks and helping people plan their retirement. That they did so in such a short time while Congress could not even figure out how to get a few bucks to bona fide disaster victims is a harsh indictment of Congress. But with Congressional approval ratings stuck in a deep trench (and rightly so), perhaps dog piling Congress for being Congress is counterproductive. Perhaps we should be pointing to companies such as New York Life and applauding them for their ongoing efforts to show their humanity. They are not the only insurer who does. Far from it; many insurers quietly carry out the kinds of charitable efforts that deserve a lot more recognition than they receive.
What would be an ideal time for such recognition to come around is when Congress inevitably decides to score easy political points by demonizing the industry and hitting them with ill-conceived regulations or to alter the tax structure of long-standing insurance products that incentivize saving, personal financial responsibility and long-term planning (three things that Congress apparently knows nothing about). At the time of this writing, many of the tax characteristics that make life insurance such an attractive financial planning device (such as inside buildup of whole life policies) are under consideration for additional taxation. Part of the reason for this is because Congress has a way of sniffing out piles of money that it really should not be sniffing out. Part of it is because they have a talent for picking on groups whose moral debt to the public is perceived to be a whole lot bigger than it really is.

In the case of life insurers, I hope that when Congress begins to consider seriously how to tax life insurance products — and the industry that sells them — into oblivion, they will recall that the life insurers are not an easy mark. I hope they will remember the real value the life insurance industry delivers to people all around the world. And I hope they will remember that moments like New York Life's campaign of giving — and those like it from other companies — speak to an underlying goodness and generosity of spirit present in this industry that must not be taken for granted, abused or mistreated.

But since we cannot count on Congress to do the right thing, even when that thing is fairly obvious even to a casual observer, allow me to applaud New York Life and its colleagues within the industry for the charitable efforts it carried out last year, and every year. The industry is not perfect. It makes really bad decisions sometimes. Sometimes, it has some truly rotten apples in its midst. But the industry is made up overwhelmingly of good people who seek to do good things for people. That is the truth. And Congress must never be allowed to forget it.